CML statistics paint promising picture for buy-to-let lending

The continued growth of the rental sector has been well demonstrated by the latest figures from the Council of Mortgage Lenders (CML), which revealed a 19 per cent annual rise in buy-to-let lending last year.

As the statistics show, the gross total of buy-to-let mortgages awarded to landlords in 2012 was £16.4 billion - up from the £13.8 billion seen in 2011.

Indeed, the fact that buy-to-let lending accounted for 11.5 per cent of total gross mortgage lending last year - up from 9.8 per cent in 2011 - is indicative of the growing popularity of the lettings game.

What's more, with the figure also being at its highest level for four years, it seems that landlords are continuing to take advantage of the sustained boom in demand for rental accommodation.

"Buy-to-let is benefiting from strong tenant demand, which is likely to continue," said CML director general Paul Smee.

"Loan performance compares favourably with the owner-occupier sector, and the overall outlook for the buy-to-let sector is positive.

"Landlords who can demonstrate a strong track record are in a good position to expand their portfolios."

But Mr Smee warned that despite the impressive profits on offer from letting property, prospective landlords thinking of entering the market need to do extensive research to ensure they're aware of the legal requirements involved.

"Considerations such as landlord licensing reinforce the need for potential landlords to gain a strong understanding of the legal and operating environment," he added.

While much has been made of restricted finance inhibiting landlords' ability to expand their portfolios, the latest figures show that lending is clearly on the rise.

And in order to take full advantage of the benefits that the buy-to-let market has to offer, it's important that investors remember to purchase landlord insurance policies to protect their assets.